Chicago cigarette tax: Mayor Rahm Emanuel proposes $0.75 increase

In an effort to close a big budget gap, Mayor Rahm Emanuel is proposing to raise the city's cigarette tax by $0.75 per pack, making Chicago's tax the highest in the country. Emanuel hopes the added tax will raise $10 million in new revenue, as he chips away at Chicago's projected $330 million deficit.

The mayor described himself as a longtime proponent of using cigarette tax revenue to help people who cannot afford healthcare. He promised the additional $0.75 a pack he'll propose this week will help provide vision care for children.

"I'm going to make sure that our kids get the health care they need that they do not get today," said Emanuel.

Already, combined state, county and city taxes add up to $6.67 cents a pack in Chicago, second only to New York City's $6.86. Emanuel's $0.75 increase would make his city's tax on cigarettes the nation's highest.

"It's a money thing all the time. It's a money thing with smoking, eating, addiction," said a smoker who did not wish to be identified.

But many Chicago smokers don't pay the existing tax...buying much lower taxed cigarettes smuggled from other states and sold in the city's "nicotine underground" now said to rival profits from harder drugs:

"When you look at selling a pack of cigarettes versus selling heroin or selling cocaine you can actually make more money selling cigarettes than selling drugs in this community," said Ald. Jason Ervin, 28th Ward.

Mayor Emanuel says the flourishing cigarette black market did not begin with city tax policy.

"There were people doing things illegal before we ever did this," said Emanuel.

In fact, the state and county separately increased their cigarette tax $1.00 per pack during the past 18 months. Downtown, a legally-purchased pack is around $12.50. Alderman Ervin says the wide difference between the taxed price in other states, compared to the taxed price in Chicago, makes the city ripe for underground sales and criminal involvement.

"Every time you increase taxes here and taxes around us stay flat that increases the margin and that's what people operate off of--the margin," said Ald. Ervin.

Mayor Emanuel also is a believer that raising the price of cigarettes will help discourage young people from smoking. But critics say the increasing number of black marketers do not check their customers' ages.